Measures taken to discourage Cash Transactions and to promote Digital Economy by CBDT

CA Santhosh Gupta Kethepalli | Last updated: 29 December 2020

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The Central Board of Direct Taxes (CBDT) has implemented several measures to discourage cash transactions and promote a digital economy in India. These include Sections 269SS and 269T, which regulate the acceptance and repayment of loans, deposits, and specified sums, mandating digital payment methods for transactions of Rs. 20,000 or more. Additionally, Section 269ST prohibits receiving cash amounts of Rs. 2 lakh or more, with penalties for non-compliance. Further measures involve TDS on cash withdrawals exceeding certain limits, encouraging the use of electronic payment systems.

Introduction:- Sections 269SS and 269T which deals with cash payment and repayment of loans and deposits. Both the sections were introduced to curb the black money. Tax evasion is one of the serious problems in India causing economic disparities. False cash transactions give birth to unacc

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FAQ :

Sections 269SS and 269T were introduced to curb black money and tax evasion by regulating the acceptance and repayment of cash transactions for loans, deposits, and specified sums.

Section 269SS prohibits taking or accepting any loan, deposit, or specified sum of Rs. 20,000 or more, otherwise than through an account payee cheque, bank draft, or electronic clearing system.

These sections do not apply to transactions involving the Government, banking companies, post office savings banks, co-operative banks, or corporations established by a Central, State, or Provincial Act, among others.

The penalty for failing to comply with Section 269ST, which prohibits receiving Rs. 2 lakh or more in cash, is equal to the amount of the receipt, imposed under Section 271DA.

The CBDT introduced Section 194N for TDS on cash withdrawals exceeding Rs. 1 crore, and further reduced this threshold to Rs. 20 lakh for those who haven't filed income tax returns for three years, with a 2% TDS applicable.